This article analyses the new European Union (EU) block exemption framework for vertical restrictions in distribution agreements. The modernization of EU distribution law addresses the need for enhanced legal certainty resulting from the entry into force of the decentralized system of competition law enforcement in 2004. It also seeks to adapt to two recent major economic developments, namely the increased power of large retailers and the growing importance of Internet sales and advertising. These evolutions are reflected in the two main innovations of the new regime: the extension of the market share threshold to the buyer and the more detailed regulation of Internet sales. Furthermore, the new framework emphasizes the possible efficiencies associated with some hard-core restrictions, which represents a welcome step towards the Commission's objective of incorporating a more economic approach into competition law. However, this constitutes only limited progress since the Commission maintains its formalistic approach of blacklisting clauses that are a priori considered to undermine consumer welfare.
World Competition